Confidentiality Breaches In Employment Law
Confidentiality in employment law refers to the obligation of employees to protect sensitive information related to their employer, even after leaving the organization. Breaches occur when employees disclose, misuse, or fail to protect confidential information.
This is often governed by:
Contractual obligations (express or implied confidentiality clauses in employment contracts)
Tort law (misuse of confidential information, breach of fiduciary duty)
Equity principles (protection of trade secrets and confidential information)
Types of Confidential Information
Trade secrets – formulas, processes, customer lists
Business strategies – pricing policies, marketing plans
Financial information – profit/loss statements, budgets
Personal information – employee records, client data
Intellectual property – software, inventions
Employee Obligations
Maintain confidentiality during employment
Do not use confidential information for personal gain
Avoid disclosure to competitors or third parties
Return all sensitive material upon leaving the organization
LEGAL REMEDIES FOR BREACHES
Injunctions to prevent disclosure
Damages for loss caused by breach
Termination of employment
Criminal liability (in some jurisdictions, e.g., data breaches)
KEY CASE LAWS (MORE THAN FIVE)
1. Faccenda Chicken Ltd v. Fowler (1986) – UK
Facts
Mr. Fowler, a former employee, took confidential information about chicken suppliers after leaving his employment.
Issue
Was the confidential information protected post-employment?
Judgment
Yes, but only trade secrets or information that had real commercial value remained protected. General knowledge and experience could be used by ex-employees.
Principle
Not all information is confidential post-employment.
Only information with commercial value and designated confidential is protected.
2. Coco v. AN Clark (Engineers) Ltd (1969) – UK
Facts
An employee used confidential manufacturing methods to benefit a competitor.
Judgment
The court set out a three-part test for confidential information:
Information must be confidential in nature
Information must have been communicated in confidence
Unauthorized use by recipient constitutes breach
Principle
This case established the legal standard for breach of confidentiality in employment.
3. Wipro Ltd v. Infosys Ltd (2005) – India
Facts
A Wipro employee joined Infosys and shared confidential client information, leading to competitive disadvantage.
Judgment
The court held that the employee and new employer were liable for misuse of confidential information.
Principle
Employers are entitled to protect sensitive client and business data.
Non-compete or confidentiality obligations must be respected.
4. Attorney General v. Guardian Newspapers (No.2) (1988) – UK (Spycatcher Case)
Facts
A former MI5 officer attempted to publish a book containing classified information.
Judgment
Courts issued injunctions preventing disclosure. Even after leaving employment, confidentiality obligations remain if disclosure harms public interest or national security.
Principle
Confidentiality extends beyond employment for sensitive state information.
Breach can be prevented via injunction.
5. PepsiCo India Holdings v. Bharat Cola (2002) – India
Facts
An ex-employee of PepsiCo joined a competitor and attempted to use confidential trade secrets about distribution and marketing.
Judgment
Court restrained the employee from using confidential information.
Principle
Reinforces protection of commercially valuable trade secrets.
Confidentiality agreements are enforceable against misuse.
6. Boardman v. Phipps (1967) – UK
Facts
A solicitor (Boardman) used confidential information from a trust to make personal profits.
Judgment
He was required to account for profits, even though the trust benefited from his actions.
Principle
Employees/fiduciaries cannot profit from confidential information obtained through employment or position.
Equity protects confidentiality strictly.
7. R. v. AIB Group plc (2007) – UK (Financial Data Breach)
Facts
Employees leaked sensitive banking data to media.
Judgment
Court emphasized the obligation of employees to maintain confidentiality; breach led to civil and criminal liabilities.
Principle
Confidentiality obligations can lead to both civil and criminal consequences.
Data protection and privacy laws supplement employment law duties.
KEY PRINCIPLES FROM THESE CASES
Confidential information must have commercial or strategic value.
Employees owe ongoing duty not to misuse or disclose sensitive data.
Courts may grant injunctions or damages for breach.
Not all knowledge gained during employment is confidential (general skills are free to use).
Fiduciary duties and contracts enforce post-employment obligations.
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